Shares in Rolls-Royce soared more than 16 percent Thursday as the British maker of aircraft engines surprised investors with a strong outlook after a rise in annual profit.

Rolls upgraded its mid-term guidance and said it would repurchase shares worth £1 billion ($1.3 billion) after net profit climbed 4.5 percent to around £2.5 billion last year.

Its share price jumped 16.2 percent in early trading on London’s FTSE 100 index, which was down 0.3 percent overall.

The group’s upgraded targets, corresponding to its 2028 financial year, include underlying operating profit of £3.6 billion to £3.9 billion.

Chief executive Tufan Erginbilgic said the company sees “strong growth prospects beyond the mid-term”.

“Strong 2024 results build on our progress… as we transform Rolls-Royce into a high-performing, competitive, resilient, and growing business,” he said in a statement.

“All core divisions delivered significantly improved performance, despite a supply chain environment that remains challenging.”

Total revenue jumped nearly 15 percent last year to £18.9 billion.

Rolls-Royce supplies engines to the world’s biggest aircraft manufacturers Airbus and Boeing, which are also enjoying a rebound in orders as the aviation sector takes off.

The engine maker’s “turnaround has been so impressive that some of its 2027 guidance has been hit two years early, causing the group to upgrade its mid-term guidance”, said Aarin Chiekrie, an analyst at Hargreaves Lansdown.

“Revenues are being boosted by the upward trend in engine-flying hours, which are now cruising above pre-pandemic levels.”

Chiekrie also noted that Rolls-Royce had also benefitted from cost savings, while the group is set to profit further from government spending on defence.

British Prime Minister Keir Starmer pledged Tuesday to boost defence spending to 2.5 percent of the UK economy by 2027, as uncertainty reigns over US President Donald Trump’s commitment to European security.

“With positions in combat aircraft and nuclear submarines, Rolls-Royce looks well-placed to capture some of the increased defence spending,” Chiekrie said.

It was not all plain sailing for Rolls last year, however.

In September, the company was hit by an engine defect on an Airbus A350 plane that led to the cancellation of dozens of Cathay Pacific flights.

Rolls-Royce turnaround ‘so impressive’, hitting its 2027 goals two years early amid soaring shares and rising profits